This week, life science company Bayer’s (BAYRY) appeal to stop thousands of lawsuits that claim the company’s Roundup (a weedkiller) causes cancer was rejected by the Supreme Court.
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The court left in place an earlier $25 million judgment that went against Bayer. At the same time, recent court verdicts involving Roundup have gone in varying directions. Last week, the 9th U.S. Circuit Court of Appeals asked the Environmental Protection Agency (EPA) to have a relook at its 2020 conclusion that glyphosate is not a serious health risk to people.
Simultaneously, Bayer has now had four victories in state court against claims that Roundup causes cancer. The company contends that regulators have repeatedly deemed its products safe and that lawsuits under state laws must be dismissed.
Farmers, on the other hand, are gunning for Roundup, which remains widely used in fields in the U.S. as well as around the globe. Glyphosate is the active ingredient in Roundup and is a major component in large-scale farming.
With thousands of lawsuits, Bayer is facing a very expensive legal challenge. The company has put aside a $16 billion war chest and estimates that it has resolved nearly 77% of the total cases. Additionally, Bayer has started removing glyphosate from Roundup for residential customers in the U.S. but maintains it will continue to sell glyphosate-based herbicides, according to the Wall Street Journal.
Despite the Supreme Court ruling, agriculture groups are sticking with Bayer, noting that the verdict may impact food supply for the globe at a time when the Russia-Ukraine conflict is already driving up food prices globally.
The American Farm Bureau Federation, the American Soybean Association, the National Corn Growers Association, and the National Association of Wheat Growers have come out in defense of glyphosate. The adoption of glyphosate-based herbicides has been on the uptick for decades now, and despite the Supreme Court ruling, farmers may not give up on their preferred weed killer just yet.
Bloggers are Bullish on Bayer
Bloggers’ opinions and sentiments about Bayer also remain Bullish. 100% of the bloggers covering the stock are positive about it, compared to a sector average of 70%.
Closing Note
The Supreme Court’s stance is a setback for Bayer. However, having already settled nearly three-quarters of the outstanding cases is a major positive for the stock.
